RUSSIA'S state atomic energy corporation, Rosatom, has moved on ASX-listed Tanzanian uranium developer Mantra Resources with an agreed $1.16 billion takeover bid as part of its drive to double in size.

The $8-a-share bid by Rosatom's mining arm, ARMZ, comes as the world's big nuclear groups seek to secure uranium reserves in support of their nuclear power station building programs for their own countries, as well as for countries that do not have the expertise.

Mantra shares closed 34¢ higher at $7.92. While the market speculated on the potential for the Russians to get some competition from Chinese, Japanese or European nuclear groups, Mantra's share price indicated the ARMZ offer was fully priced.
Advertisement: Story continues below

The offer represents an effective $US10.26 a pound for the uranium resource that Mantra has outlined at its flagship Mkuju River uranium property in southern Tanzania. That compares with the average of $US12 a pound investors have been paying for established uranium producers but is up substantially on the $US2 a pound average being paid for explorers and would-be developers like Mantra.

Mantra's major shareholder, with a 13.5 per cent shareholding, Highland Park, intends to accept the bid, in the absence of a higher offer emerging. The bid is subject to clearance from the Australian Foreign Investment Review Board. But given Mantra's African focus, that is not expected to be an issue. Mantra is also about 27 per cent on the Canadian market.

ARMZ has a presence in Australia through its majority ownership of Canada's Uranium One, which owns a 51 per cent stake in the $138 million Honeymoon uranium project in South Australia, a joint venture with Japan's Mitsui & Co.

Mantra chief executive Peter Breese said the offer from ARMZ was a compelling ''clean, all-cash offer''. He said that the premium to Mantra's pre-bid market price (21 per cent on the 30-day average) reflected the ''strategic significance'' of Mkuju River as well the ''current status of the project against the backdrop of a recent spike in the uranium price''.

Uranium prices have risen from $US40 a pound to $US60 a pound as China has bought heavily before commissioning new nuclear power stations.

Perth-based Mantra, which is focused on its flagship Mkuju River project in Tanzania, said today ARMZ has offered $8 per share cash - a 5.5 per cent premium to yesterdays closing price of $7.58.

Shares in Mantra jumped 4.49 per cent at $7.92 at todays close.

Mantra, advised by RBC Capital Markets, has recommended the scheme of arrangement and said the deal of $US10.26 per pound of resource values the company significantly higher than other substantial uranium developers.

Mantra said Highland Park SA, which owns 13.5 per cent of its outstanding fully diluted share capital, has said it would vote in favour of the deal in the absence of a superior proposal.

Subject to an independent expert determining the scheme is in the best interests of shareholders, Mantras board has agreed to unanimously recommend ARMZs offer.

This clean, all-cash offer from ARMZ is compelling and reflects both the strategic significance of this asset as well as the current status of the project against the backdrop of a recent spike in the uranium price, said Mantra CEO Peter Breese.

The offer crystallises immediate value for Mantra shareholders, providing them with the certainty of cash.

The director-general of ARMZ, Vadim Zhivov, said the Mkuju River project was a world-class deposit that, along with its other assets, would complement its portfolio of assets.

The scheme is conditional upon the approval of Australias Foreign Investment Review Board, but no further due diligence is required.

By Greg Peel | 14/12/2010
A bit of urgency entered the spot uranium market last week as a group of sellers from both the producer and speculator stables looked to offload U3O8 before year-end. Eight transactions saw a total of just over one millions pounds change hands but as industry consultant TradeTech reports, the buyers were undeterred.

By week's end the spot price was pushing higher once more, with TradeTech's indicative price up US25c for the week to US$60.50/lb. The mid and long term prices remain at US$62 and US$65 respectively.

Last week's volume brought the year-to-date total to 41.6m pounds of U3O8 equivalent. With three weeks to go, that's already a record. It is testament to the bubble-and-bust mirage that was 2007 that the previous record was not set in this tumultuous year but all the way back in 1990, when 40.6m pounds changed hands.

One assumes 1990 represents the last time there was a burst of reactor building activity, with Europe in the fore back then. We now have another burst &#8211; this time out of Asia most specifically &#8211; leading to increased demand which is now "real" rather than speculative as was the case in 2006-07.

Perth-based Mantra, which is focused on its flagship Mkuju River project in Tanzania, said today ARMZ has offered $8 per share cash - a 5.5 per cent premium to yesterday's closing price of $7.58.

Shares in Mantra jumped 4.49 per cent at $7.92 at today's close.

Mantra, advised by RBC Capital Markets, has recommended the scheme of arrangement and said the deal of $US10.26 per pound of resource values the company significantly higher than other substantial uranium developers.

Mantra said Highland Park SA, which owns 13.5 per cent of its outstanding fully diluted share capital, has said it would vote in favour of the deal in the absence of a superior proposal.

Subject to an independent expert determining the scheme is in the best interests of shareholders, Mantra's board has agreed to unanimously recommend ARMZ's offer.

"This clean, all-cash offer from ARMZ is compelling and reflects both the strategic significance of this asset as well as the current status of the project against the backdrop of a recent spike in the uranium price," said Mantra CEO Peter Breese.

"The offer crystallises immediate value for Mantra shareholders, providing them with the certainty of cash."

The director-general of ARMZ, Vadim Zhivov, said the Mkuju River project was a world-class deposit that, along with its other assets, would complement its portfolio of assets.

The scheme is conditional upon the approval of Australia's Foreign Investment Review Board, but no further due diligence is required.

Click to expand...

As a Country, how do we benefit from this deal? Maana naona Wakuu wako kimyaaaaaaa! isije kuwa wameshakatiwa % zao.